Nadine Chakar is adept at proving sceptics wrong. The first head of Bank of New York Mellon Asset Servicing in Europe, the Middle East and Africa, has been working in the custody industry for 19 years, predominately at Mellon. And for much of that time, she has been building businesses that many believed would fail.

Some in the industry are dying for us to slip up, but we are cautious about the business we take on

Nadine Chakar, BNY Mellon

Her biggest break and biggest challenge came in 1998, when she was asked to look into a potential partnership with ABN Amro. She was made managing director of the original marketing alliance; when it was formalised as a joint venture in 2003, she became chief executive.

She said: “I have overseen this company from an idea on the back of a napkin to a company of 550 people. When we soon become part of the Bank of New York Mellon, I will have seen assets under custody go from $0 to $20 trillion in nine years.” There can’t be many people in the custody industry that have presided over that kind of growth.

Chakar said: “People were sceptical that we could make ABN Amro Mellon work but the joint venture became the benchmark for client service in the industry. Everyone told us we were going to fall flat on our faces and I take great pride in having proven them wrong. I genuinely believe that in two years’ time, I will be able to do the same to the people that don’t believe the Bank of New York Mellon merger will work.”

She may be used to contradicting industry naysayers but this time she has an additional person to prove wrong: herself. In an interview in February last year, Chakar said: “There is no glory in being big these days.”

She was contributing to the custody industry’s perennial debate about how large trust banks can come close to matching the client service capabilities of smaller firms. At the time, assets under custody at ABN Amro Mellon Global Securities Services stood at €3.8 trillion ($5.27 trillion), making it the fifth-largest global custodian.

Today she is working for the world’s largest custodian, with $20 trillion in assets under custody. She is also helping to splice together two banks from either end of the R&M client service survey. Many in the industry are speculating as to whether the merged bank will be able to retain Mellon’s famed client servicing ability and other firms are waiting in the wings if clients become disillusioned.

Chakar said: “Yes, we are big. But we don’t want to be known for that. We want to be known as the best provider on the planet. Things change. Our clients are playing a game of skill. They are leaving no stone unturned and following the sun in search of alpha. That requires 24/7 processing and the technology to support it.”

She highlights the recent market turmoil – “the first credit correction in history” – as well as the fast-moving regulatory environment. She also argues that pension funds have become increasingly innovative, with many of the world’s largest schemes managing their own money and investing in ever more esoteric areas.

She points to one of her more long-standing and trail-blazing clients, Dutch pension scheme ABP, which invests in timber, among other unusual asset classes. Such clients need ever-higher levels of support from their custodians. Chakar said: “To keep pace, you need technology and know-how. And that requires money. We all face resources constraints – hopefully we will now face fewer.”

For seven months after the deal was announced, the two banks were barred by US Department of Justice restrictions from making any private or public statements. To Chakar, this has been a blessing – business was able to continue, more or less, as usual.

Chakar’s team continues to book business on the back of a record 37 new mandate wins worth €185bn last year. By the third quarter last year, some commentators were questioning whether ABN Amro Mellon had the capacity to cope with such rapid growth. Any talk was silenced by December when Mellon’s deal with Bank of New York was announced.

This year, BNY Mellon Asset Servicing announced 41 mandates in the first half of 2007, according to data from Scrip Issue, an investor services news and information website. This is equal to the combined total of the companies in second, third and fourth place, said Scrip. JP Morgan was second place with 14 new mandates; State Street was third with 12 and Northern Trust fourth with 11. Last month, BNY Mellon Asset Servicing won the €1bn Dutch Merchant Navy pension fund and also added a $4.2bn (€3bn) mandate from Ireland’s EBS Building Society.

Chakar said: “There are some in the industry that are dying for us to slip up, but we are being cautious about the new business we take on. We want to make sure we can over-deliver.”

With Mellon’s buyout of ABN Amro from the joint venture set to complete by the end of the year – the final step to becoming Bank of New York Mellon – Chakar has been able to start building her asset servicing team. She stressed the integration effort will be minimal. “I can now tell my staff that they can take their careers as far as they like because they now work for one of the largest banks in the world.”

The line-up will include Robert Darmanin, from the Bank of New York, as head of sales and marketing; his BNY colleague Daron Pearce as head of relationship management Emea; Mellon’s Don Gould has been appointed head of client operations and Clare Coxhead, also from Mellon, will be chief of staff.

Chakar said: “Staff turnover has actually dropped. This is the most stable ship I have been in charge of. Perhaps some of that is down to luck, but they say you make your own luck.”

Technology is also being merged, basing it largely on Mellon’s real-time online information delivery platform Workbench, which Chakar helped to develop early in her career. Although final details have yet to be worked out, Chakar said: “The technology platform of the company will build on Mellon’s pension tilt and BNY’s legacy of servicing financial institutions. We have expanded the product offering. The products are modular in design so they can be customised for clients, so it is effectively bespoke.

“I doubt we service any two clients in the same way – no other custodian can boast that. By building on Mellon’s servicing legacy and BNY’s product breadth, we are going after mandates that neither bank could have touched before July 1.”

Although it is widely perceived that Mellon brings client servicing knowledge to the party while Bank of New York provides the grunt, Chakar’s business has not escaped its soured deals. Most prominent was Mellon’s outsourcing contract with UK fund manager F&C Management, which was terminated in May.

Mellon had signed a seven-year deal to run F&C’s back office in 2003, but when the fund manager bought Isis Asset Management in 2004 it led to a long-running discussion about who should run the back office of the new side of the business. In the end, Isis was run in-house, leaving the two firms’ relationship in a strange twilight zone.

Chakar said: “Things evolve, things change. Seven years is a long time. Following F&C’s merger with Isis, its business evolved. It became difficult for F&C to run outsourced and in-house back offices concurrently. But F&C is a massive client for us. It all ended amicably.”

Nevertheless, she concedes that there are lessons for the industry about how outsourcing deals are struck. She said: “The outsourcing party is over. We have all recovered from the hangover and are thinking clearly. As an industry, we need to be realistic and do deals that make sense, not just for the thrill of doing them. Those days are over.”

She said that in the future outsourcing deals would be “modular” and “quieter” and that BNY Mellon would not fall into the trap of trying to gain market share for its own sake.

Chakar said: “We don’t buy deals – that is not the way to operate in this business. Just because we are big doesn’t mean we are stupid.”